India and Iran sign crucial Chabahar Port contract

Indian Ports Global Limited (IPGL) and Iran’s Port & Maritime Organisation (PMO) have signed a long-term bilateral contract. This agreement allows IPGL to operate the Shahid Beheshti terminal at Chabahar Port for the next 10 years.

| Updated: 14 May, 2024 1:31 pm IST

NEW DELHI:  After years of negotiations, India and Iran have finally signed an agreement to manage the Chabahar Port for the next decade. Union Minister of Ports, Shipping & Waterways, Sarbananda Sonowal, boarded a special Indian Air Force flight bound for Iran on Monday, to witness the signing of a crucial contract that will grant India a long-term lease of the port, with significant implications for India’s presence in West Asia.

Indian Ports Global Limited (IPGL) and Iran’s Port & Maritime Organisation (PMO) have signed a long-term bilateral contract. This agreement allows IPGL to operate the Shahid Beheshti terminal at Chabahar Port for the next 10 years.

This move marks a historic moment as India takes over the management of an overseas port. Under the contract, India will invest $85 billion in the Shahid Behesti terminal. The strategic significance lies in creating a new trade route connecting South Asia and Central Asia via Iran—an alternative to China’s Belt and Road initiatives.

ALSO READ: MEA advises against travel to Iran and Israel

“Today marks a milestone for our region’s maritime industry with the signing of the Chabahar Port agreement between India and Iran. This deal opens doors to increased trade and cooperation, especially benefiting India, Iran, and Afghanistan. With India’s ongoing investments, the port’s performance and capabilities will improve, showing our dedication to the economic growth of the area,” said Sonowal during the contract signing.

Back in 2016, India had signed a tripartite agreement with Afghanistan and Iran to develop the Shahid Beheshti Terminal. Landlocked countries like Uzbekistan and Kazakhstan have expressed interest in utilizing the Chabahar route to access the Indian market. By bypassing Pakistan’s Karachi and Gwadar ports, this development opens up fresh economic opportunities, steering away from the congested Persian Gulf and the sensitive Strait of Hormuz.

ALSO READ: Iran seizes cargo ship ‘MSC Aries’ with 17 Indian nationals onboard

The Chabahar Port contract represents another major achievement in India’s expanding maritime influence in the region. Just last year, in May 2023, Sarbananda Sonowal inaugurated the Sittwe port in Myanmar to counter China’s growing presence.

Furthermore, by developing Chabahar Port to connect with the International North South Transport Corridor (INSTC), India can strengthen ties with Russia and Central Asia. These strategic moves position India as a key player in regional trade and connectivity, diversifying options and reducing reliance on traditional routes.

 

Also Read Story

Delhi Police record Swati Maliwal’s 164 CrPC statement

Chandigarh High Court denies bail for Amritpal’s aides

FIR lodged against Delhi CM’s PS for alleged assault

Cyber-attacks on Mammootty persist; politicians show support